1. Vehicle Lifecycle Administration (VLA) AAMVA-Official Use Only1 Patrice Aasmo, AAMVA Staff Vivienne Cameron, AAMVA Staff Deb Hillmer, Chair, E-Titling Working Group

2. Session Outline: AAMVA-Official Use Only2  Update on NMVTIS Strategic Initiatives –Reducing costs: Reengineering –Increasing Revenue: State Fees – FY’13 and FY’14 Consumer access  Update on NMVTIS Operational Status –Overall program view –State program –New Working Groups

3. Session Outline: AAMVA-Official Use Only3  NMVTIS Junk, Salvage and Insurance (JSI) total loss vehicle reporting program review –States reporting data on behalf of reporting entities –Costs, etc  E-titling Update

4. NMVTIS Strategic Initiatives Reduce System Operating Costs:  System re-engineering –AAMVA’s investment $4 million –No negative impact on states or other stakeholders –Rewrite the mainframe COBOL code to MS.NET –Migrate from DB2 to MS SQL Server –New Service Oriented Architecture web services –Development underway, completion projected December 2012 AAMVA-Official Use Only4

5. NMVTIS Strategic Initiatives (cont’d) Revenue Generation:  State user fees: -AAMVA Board and DOJ Approved August 2011 -State fees will cover a maximum 50% of total NMVTIS operational costs -For FY ‘13 NMVTIS cost estimated at $5 M -Fee memo issued in September 2011 -Invoicing will begin October 1, 2012 -Work underway to calculate FY’14 fees using same model -Once approved, fee memo will be issued prior to October 1, 2012 AAMVA-Official Use Only5

6. Generating Revenue:  State Fee and Consumer Access Revenues: –50% credit of each consumer access transaction that results in title or brand data returned for a VIN pointing to that state as current state of title (CSOT) will be applied until the fees are offset at 100% and any credits beyond the state fees will be applied to aforementioned state as well AAMVA-Official Use Only6 NMVTIS Strategic Initiatives (cont’d)

7. Generating Revenue:  Consumer Access: –Eight authorized providers in production –Experian and Carfax are also in development for implementation by July 1, 2012 –California legislation AB1215 – requires all used car details to provide a NMVTIS Vehicle History Report on all vehicles offered for retail sale, effective July 1, 2012 –Other states considering similar actions –Continue to pursue potential of consumer access to theft data AAMVA-Official Use Only7 NMVTIS Strategic Initiatives (cont’d)

8. NMVTIS Operational Update AAMVA-Official Use Only8

10. States and NMVTIS AAMVA-Official Use Only10

11. Operational Status  Stakeholder Management: –To ensure the ongoing operation of the system is in line with stakeholder needs/requirements –Four working groups are being established: 1.State Business Rules Representation: regional, NMVTIS status, AAMVA, DOJ Vehicle Standing Committee 2.Law Enforcement Representation: regional, NMVTIS status, AAMVA, DOJ LE Standing Committee 3.Consumer Access 4.Third Party Reporting AAMVA-Official Use Only11

12. NMVTIS Third Party Reporting Program Review AAMVA-Official Use Only12

13. Third Party Program Review Concern: – Recycler and shredder industry concerned about double reporting as well as the cost to report to NMVTIS Their strategy: –Focus effort to have state agencies collect the required NMVTIS data and report into NMVTIS on their behalf, at no cost –Successful in GA last year, other recent draft legislation in MS, SC, TN AAMVA-Official Use Only13

14. Myth vs. Reality Myth: –“States are already reporting data to NMVTIS – this is a simple just add a few more data points.” –“This shouldn’t cost much more?” Reality: States must operate similar to current data consolidation services. –Different technical solution from current state data provision –Must establish administrative procedures/protocol to register reporting entities, issue IDs, etc. –Must establish customer service support to handle errors etc. –TN fiscal impact - $9,800 one time fee, $96,000 ongoing annual cost AAMVA-Official Use Only14 Third Party Program Review (cont’d)

15. Questions for consideration: 1.Is that the best approach? 2.How can states use JSI information? Example: NYS DMV – obtains JSI information from NMVTIS on weekly basis that helps support their Destroyed Vehicle Program AAMVA-Official Use Only15 Third Party Program Review (cont’d)

16. Electronic Vehicle Titling Proof of Concept AAMVA-Official Use Only16

17. Background AAMVA-Official Use Only17 E-Titling Working Group requested AAMVA Board consider a member-driven ‘proof of concept’ for electronic vehicle titling August 2011 Board approved staff pursuit of requirements definition, scope and budget for a pilot Final deliverables E-Titling Proof of Concept Definition AAMVA E-Titling Scope and Costs Board approved going forward with a proof of concept pilot

18. Why E-Titling? AAMVA-Official Use Only18 E-Titling will minimize the following: Paper handling Investigative/Administrative efforts Opportunities for document fraud E-Titling contains opportunities to: Streamline processing and reduce stakeholder burdens (save money) Provide new revenue streams (earn money)

19. Why AAMVA? AAMVA-Official Use Only19 Request from the members Efficiency through use of existing infrastructure (i.e., network connectivity, NMVTIS and ELT) Neutral/standardized interstate transacting 2012-2014 Strategic Plan “sweet spot”

20. Proof of Concept Pilot: Scope AAMVA-Official Use Only20 Implement paperless process for all stakeholder groups involved in the first-time titling of new motor vehicles*. Stakeholder groups are as follows: Vehicle Manufacturers Vehicle Dealers State Titling Agencies Vehicle Lien Holders Consumers * New motor vehicles defined as: New passenger vehicles SUVs and property carrying vehicles with a GVWR of less than 10,000lbs. Motorcycles, trucks (GVWR over 10,000 pounds), and trailers are not considered in scope for the pilot. Must be produced by NHTSA approved manufacturers of vehicles available for sale in the U.S. that conform to the federal motor vehicle standard 17-Digit vehicle identification number.

21. Proof of Concept Pilot: Goal/Approach AAMVA-Official Use Only21 Goal: Demonstrate cost savings, process efficiencies and reduction in fraud by implementing technology and procedures to use electronic records to track a new vehicle from its manufacturer to its first title issuance. Approach: Remain a state-initiated and state-controlled program To the extent possible, use or adapt existing tools or systems including those: Under direct state control Provided by industry Controlled by the Federal Government Comply with both State and Federal Regulations Collaborate with industry stakeholders to gain their support

22. AAMVA-Official Use Only22 Data Exchange 1.CREATE MCO 2.SEND MCO TO DEALER 3.REASSIGNMENT 4.VERIFY CONSUMER IDENTITY * 5.TITLE APPLICATION 6.VERIFY DEALER STANDING * 7.VERIFY TITLE INFORMATION 8.CHECK NMVTIS 9.ACKNOWLEDGE LIEN 10.CREATE TITLE 11.NOTIFY CONSUMER * * Optional step

23. Data Exchange AAMVA-Official Use Only23

24. Proof of Concept Pilot: Deliverables AAMVA-Official Use Only24 The E-Titling Proof of Concept will use the definition document and evaluation criteria to execute the Proof of Concept with a limited set of stakeholders. The execution of the Proof of Concept will result in the development of the following deliverables: Project Plan Roadmap for E-Titling Standardized Data Definition of E-Titling Record MCO System Modifications to enable E-Titling AAMVA ELT Service Requirements Return on Investment Analysis Proof of Concept Evaluation Report Best Practices All deliverables will be reviewed and approved by participants in the state E-Titling Proof of Concept Task Force. Industry stakeholder groups will be engaged in the Proof of Concept pilot and be given the opportunity to develop and review deliverables.

25. Proof of Concept Pilot: Duration AAMVA-Official Use Only25 Projections for time frames on a potential pilot include the following: July 2012 through January 2013: Prepare infrastructure and data integration standards January 2013 through September 2013: Pilot participants implementation September 2013 through May 2014: Pilot operation and evaluation

26. Participation Commitment AAMVA-Official Use Only26 Commitment in the form of LOIs have been received from the following as it relates to participation in a proof of concept pilot: States: Seven working group states for pilot, others have shown interest NICB Manufacturers Dealers Lenders

27. APPENDIX AAMVA-Official Use Only27

28. AAMVA E-Titling Working Group AAMVA-Official Use Only28  Debra Hillmer, South Dakota, Chair  Monica Blackwell, Texas  Karen Grim, Virginia  Paul Zelenski, Wisconsin  Stacey Stanton, Arizona  Kitty Kramer, California  Boyd Walden, Florida  Andrew Lewis, Iowa  Debbie Rogers, Maryland  Tom McCormick, Vermont  Lotte Devlin/Sharon Madison, South Carolina  Scott Clapper, Delaware  Janet Dolan, Pennsylvania* * NOTE: Representative of Vehicle Committee (Chair) and in this role, serves ex- officio on the E-Titling Working Group